10.5.10 Quality Costs
A key ingredient to the road of total quality is cost-based discipline. A sound quality system contributes to customer satisfaction and organisational objectives, including financial stability in the learning organisation. Significantly, quality costs are normally overlooked or unrecognised in many organisations because accounting systems are not designed to identify them.
Quality cost, or cost of quality, is defined as the cost of those activities which an organisation or process has over and above the minimum required to do the job well. Any cost associated with correcting failure or waste go into quality costs, as do any assurance or approval activities built in to cushion customers from the effects of such failures. ...
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